On March 31, the Biden administration formally presented its $2 billion infrastructure plan, officially called the American Jobs Plan. The American Society of Civil Engineers (ASCE) recently published its 2021 Report Card for America's Infrastructure , giving the country an overall score of C-. Additionally, the US has the highest GDP in the world (almost $21 trillion), but ranks 13th in infrastructure according to the Global Economic Forum.
The American Jobs Plan covers several areas, and there was a detailed publication from the White House on March 31. However, five areas of the plan are very relevant to the construction industry: transportation, energy, water systems, internet connectivity and affordable housing. In this article, we will provide a brief overview of these five priority areas.
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1) Transport, especially roads and bridges
The Biden Administration revealed that the US has 173,000 kilometers of roads in poor condition, which represents 20% of the country's road infrastructure. There are also 45,000 bridges in need of urgent maintenance, and the US Department of Transportation has a $1 trillion repair backlog. The White House fact sheet also stated that the US economy loses about $160 billion a year due to traffic congestion.
By far, transportation is the priority area of Biden's Infrastructure Plan. This includes a $621 billion budget for transportation and resilience projects, and $115 for the most urgent repairs to U.S. roads and bridges. There is also a strong emphasis on decarbonising transport and there are plans to deploy 500,000 Electric Vehicle Chargers by 2030.
2) Clean energy sources and electrical grid resilience
A study by the US Department of Energy concluded that blackouts cost the economy around $70 billion a year. The vulnerability of US power grids to extreme weather was evident during the February 2021 winter storm , especially in the state of Texas. Considering this, the infrastructure plan includes a $100 billion budget to repair and modernize the country's electrical grids, and the US DOE will have a new division called the Grid Implementation Authority.
The Biden Administration also aims to fully decarbonize the electricity sector by 2035, and this will begin with the use of 100% clean energy in government buildings. Additionally, a 10-year extension for renewable energy tax credits is being proposed that would add to the smaller extension approved in December 2020.
3) Water Systems: Drinking Water, Wastewater and Stormwater
It is estimated that there are still between 6 and 10 million homes that depend on lead pipes for their water supply, despite the proven health risks, especially for children. According to the White House fact sheet, eliminating lead pipes would also benefit approximately 400,000 schools and day care centers. The ASCE report card identified the limitations of water infrastructure in the US: drinking water systems scored a C-, stormwater systems scored a D, and wastewater systems scored a D+.
Considering these issues, the American Jobs Plan includes $45 billion to eliminate lead pipes completely, combined with $66 billion to modernize water infrastructure overall.
4) Internet Connectivity
The importance of a reliable internet connection became evident during the COVID-19 pandemic: millions of employees were forced to work remotely while millions of students began taking classes online.
However, this transition is only possible with a reliable internet connection, and the Biden Administration has reported that 30 million Americans still do not have high-speed internet. For this reason, there is a budget of 100 billion dollars to improve connectivity across the US.
5) Affordable Housing
The National Low Income Housing Coalition publishes its annual Gap Report, and the 2021 edition revealed an alarming trend. For every 100 income-challenged households (below the poverty line or 30% of area median income), there are only 37 affordable homes available. The lack of affordable housing is even more severe in urban areas, where availability is as low as 16 affordable homes per 100 low-income households.
As part of the infrastructure plan, the Biden administration announced $213 billion to build or renovate more than two million affordable homes. This benefit will reach affordable housing projects in the form of subsidies, tax credits and other types of financing. To complement this investment in affordable housing, the plan also includes $100 billion for public schools, covering new construction and improvements to existing buildings.
Conclusion
US infrastructure has many areas of opportunity, and this was revealed by both the World Economic Forum and the ASCE Report Card for America's Infrastructure. The Biden administration's $2 billion infrastructure plan covers many key areas: transportation receives the largest budget, and there are also major investments in water systems, electrical grids, connectivity and affordable housing.
